Which Comes First-Democracy or Wealth? What Makes a Country a Wealthy, Successful Democracy? Is It Policy, or Ideas or the Quality of People, and Its Leadership? or Is Income per Capita the Most Important Factor? Recent Research Seems to Draw a Direct Correlation between Income and Democracy-But There Are Twists and Contradictions. Richard Walker Analyses This Controversial Theory Gaining Ground in African Think-Tanks

By Walker, Richard | African Business, August-September 2013 | Go to article overview

Which Comes First-Democracy or Wealth? What Makes a Country a Wealthy, Successful Democracy? Is It Policy, or Ideas or the Quality of People, and Its Leadership? or Is Income per Capita the Most Important Factor? Recent Research Seems to Draw a Direct Correlation between Income and Democracy-But There Are Twists and Contradictions. Richard Walker Analyses This Controversial Theory Gaining Ground in African Think-Tanks


Walker, Richard, African Business


ARE YOU ALLOWED TO VOTE FOR whoever runs your country? If you are allowed to vote, is the election free with anyone allowed to run as a candidate, irrespective of political party or government connections? Can you express your views without being clapped in prison or sacked from your job? Whatever the answers, you might well assume that it is the state of politics and government in Africa that will determine the result. But there is another view that says politics is irrelevant. What counts is per capita income.

The argument is simple. The clash of ideas, of religions and of politics has nothing to do with whether a country is a democracy or a dictatorship. If you look at historical trends in the levels of income and in the evolution of political systems in countries anywhere in the world, there emerges a very clear link between certain levels of wealth and the emergence of democracy.

That at least is the conclusion of many political economists. If you live in a country with a per capita income over $10,000--like Botswana--you are almost certainly to be living in a strong democracy. If you live in a state where the per capita income is less than $1,000 (and unfortunately there are plenty of African examples) you are almost certain to be living in a strong autocracy.

The political character of everywhere in between those two extremes is likely to be determined by just how much income there is to go around. With every dollar more of income, the chance of turning democratic increases, and that chance can be calculated to an exact percentage. If true, it turns out that business is what determines freedom.

Take Egypt, for example, a country that straddles Africa and the Middle East, and which is currently experiencing a raging conflict between the army, Islamists, and reformist pro-democrat liberals. The debate over the state of democracy in the country is intense: many believe democracy cannot survive.

But according to the 'money equals democracy' theory, what happens in the public squares and the mosques of Cairo is completely irrelevant to the political outcome. The only thing that is relevant is that some time next year, Egypt will pass the $6,000 annual per capita income mark (because surprisingly enough, Egypt's economy is still growing at around 5% a year). And if a country passes that critical point with a working democracy in place, then there is only a 1% chance in any year that democracy will fail.

The theory

This is not a new theory. Most recently some work has been done by Charles Robertson and Renda Rundle at Renaissance Capital or 'Rencap', an investment bank that concentrates on emerging markets, that supports the idea that Africa's political future is shaped by its income levels. They say that the moment that any one country will move from autocracy to democracy can be mapped on to a future calendar with a precise degree of likelihood. They also claim that once a country gets above a certain level of per capita income and turns democratic, there is almost zero chance of slipping back.

But this work only builds on earlier research. Two political scientists called Adam Przeworski and Fenando Limongi published similar research in 1997, tracking 80 countries over 50 years to determine whether there was a correlation between GDP and the likelihood of democracy taking hold.

That in turn built on work published in 1959 by the sociologist Seymour Lipset and much more recently, the idea that as countries get richer they tend to get more like Western democracies was popularised by Francis Fukuyama in his 1992 book The End Of History And The Last Man. All of these research projects share one conclusion: that democratic systems are the logical end-point of development, and once a country's economy is generating enough income, the democratic transition is next to inevitable.

The big question is: are they right?

Unfortunately, in the case of Africa, the answer is not simple. …

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Which Comes First-Democracy or Wealth? What Makes a Country a Wealthy, Successful Democracy? Is It Policy, or Ideas or the Quality of People, and Its Leadership? or Is Income per Capita the Most Important Factor? Recent Research Seems to Draw a Direct Correlation between Income and Democracy-But There Are Twists and Contradictions. Richard Walker Analyses This Controversial Theory Gaining Ground in African Think-Tanks
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